As earnings season wraps up, I always like combing through my ideas to see which ones are working out and which ones still have some work to do. While I tend to invest with a three- to five-year timeline in mind, things can change quickly in the market these days, so it helps to check in every once in a while.
In June 2013, I put together a portfolio of 10 stocks with the ultimate goal of beating the market over the long haul. I coined it the "Father's Day Portfolio," and you can see the holdings and learn more about it here. Given that we're about eight months in, I figured now is as good a time as any to take a gander.
I'm still winning
Of the 10 stocks I picked, nine are showing positive returns today, and the one that is actually losing is only down by 0.1% (it's OK Ford, I won't hold it against you). Of course, the market had a phenomenal 2013, so it's only natural to expect 2014 to be a bit tamer. When pitting each one versus the market, six are outperforming, and four are underperforming. Yep, right in line with Peter Lynch's old axiom: "In this business, if you're good, you're right six times out of 10. You're never going to be right nine times out of 10."
The top performer this go-round is St. Jude Medical (STJ), beating the market by 34 percentage points, and the laggard of the bunch is Ford (F 1.13%), which is losing to the market by 13.7 percentage points. In total, based on a hypothetical $1,000 invested in each stock along with a matching position in the S&P 500, the Father's Day Portfolio has returned 19.7% versus the market's 13.7%.
The prescription for profits
I originally recommended St. Jude Medical a while back in my real-money portfolio I ran here at the Fool for a couple of years. And though I closed that down because of time constraints, St. Jude has remained on my radar. I like the company thanks to its diverse product mix that covers everything from heart devices and strokes, to Parkinson's and migraines.
While the market has cheered on a fourth quarter that beat expectations all the way around, it's not so much about what the company did then as much as what it's doing now. Clinical research continues for the Nanostim Leadless pacemaker, which, while it has yet to gain FDA approval, was recently implanted in its first patient. The implications of a non-surgical pacemaker are exciting to consider, and St. Jude is leading the way with its phenomenal medical technology.
A long drive ahead
Ford, Ford, Ford... what am I going to do with you? Actually, I can't complain at all about what Ford the business continues to do. With a great fourth quarter in the books and what looks like a solid start to the new year, Alan Mulally has the business firing on all cylinders. And while he won't be there forever, I do believe he has implemented a badly needed culture shift at Ford that should continue to pay dividends once he does leave.
Speaking of dividends, the company doubled its dividend in 2013 and hit a number of milestones in the fourth quarter worth mentioning, including: its 18th consecutive profitable quarter, year-over-year top line growth for the fifth consecutive quarter, and a record 4.4% market share in China. Cars are not an easy business, but I still like the idea of having Ford in the portfolio for the long haul.
The Foolish bottom line
There aren't really any long-term lessons to gain from a portfolio that's only eight months old. Things can and do change quickly, and what's here today can be gone tomorrow. But I'm also a big believer in knowing what you own. And in this case, while the Father's Day portfolio isn't a real-money portfolio, it is one I'm intent on keeping track of indefinitely. Remember, there are lessons to be learned in every investment you make and every stock you pick. All you have to do is keep score.